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Compulsory and Voluntary Medisave Contributions

Self-employed persons must make compulsory Medisave contributions upon receipt of the Notice of Computation (NOC) of CPF Contributions from IRAS. Voluntary Medisave contributions may be claimed as tax reliefs to reduce the amount of tax payable.

Making Compulsory Medisave Contributions

Contributions must be made within 30 days of the date stated in the Notice of Computation (NOC) of CPF Contributions from IRAS. The NOC would state clearly how much you have to contribute.
IRAS sends the NOC after assessing your income i.e. after you have filed your income tax return and received your Notice of Assessment. You do not have to wait for the NOC to make your contributions. Contributions may be made throughout the year.

Alternatively, you may also make your contributions through GIRO Instalment Plans. The payments will be according to the instalment plan issued by the Central Provident Fund (CPF) Board. Please contact the CPF Board directly to arrange for the payment of your Medisave.

Tax Relief for Voluntary Contributions

You have made voluntary contributions to your Medisave account in the previous year; and

You derived any source of income (e.g. from rental, director's fees, etc.) in the year you made the voluntary contributions.

Please note that there will be a
personal income tax relief cap of $80,000, which will apply from the Year of Assessment (YA) 2018. This cap applies to the total amount of all tax reliefs claimed, including any relief on voluntary CPF contributions made on or after 1 Jan 2017.

There will be no refund for accepted voluntary CPF contributions. As such, taxpayers who make voluntary CPF contributions on or after 1 Jan 2017 should take note of the overall personal income tax relief cap. You should evaluate whether you would benefit from tax relief on your voluntary CPF contributions and make an informed decision accordingly.

Voluntary Contributions to Medisave Account (VC-MA) by Companies

Companies (e.g. taxi companies) which have qualifying contracts with self-employed persons (e.g. taxi drivers) may make voluntary cash contribution to the Medisave Accounts (VC-MA) of the self-employed persons and claim tax deductions on such contributions, subject to conditions.

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FAQs

Can I obtain a refund of the voluntary CPF contributions I made in year 2017, if for YA 2018, the total amount of personal relief which I can claim is more than $80,000, even without any tax relief on voluntary CPF contributions I made?

There will be no refunds for accepted voluntary CPF contributions. As such, taxpayers who make voluntary CPF contributions on or after 1 Jan 2017 should note that the overall personal income tax relief cap of $80,000 applies from YA 2018 (when the income earned in 2017 is assessed to tax). Hence, you should evaluate whether you would benefit from tax relief on your voluntary CPF contributions, and make an informed decision accordingly.